I’m not surprised that Mississippi Treasurer Lynn Fitch isn’t surprised that Standard & Poor’s has seen through the state’s ruse of a budget.
S&P, in a report issued Monday, downgraded Mississippi from stable to negative.
“This downgrade should come as no surprise,” Fitch said in an emailed statement. “In fact, we’re fortunate it wasn’t worse. Mississippi is making progress with our unemployment rate dropping and our positive economic growth, but we are still lagging behind most of the nation. And, with our population growth stagnant, it’s only common sense that investors would have concerns.”
Perhaps lawmakers will listen to Fitch’s prescription for financial health this time. They didn’t last year when Fitch released her debt affordability study that advised them to get a grip on the state’s above-average debt load. That was one factor S&P saw as a drag on the state. And in March, the Bond Commission issued state officials some guidelines for managing the state’s debt.
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“That makes it all the more important that the Mississippi Legislature implement very prudent and very responsible fiscal policies when it comes to spending, taxing, and borrowing,” she said this year. “Standard and Poor’s put Mississippi on notice with this report. We have a likelihood of one in three of downgrade in the next two years, so we have time to turn things around before more serious consequences for taxpayers.
“As Treasurer, I will do my part to encourage the Legislature to head down a more fiscally conservative path. And, as a Trustee of the PERS Board, I will do whatever I can to ensure that S&P never again says that we are lagging in our responsiveness to a declining funded ratio.”
Fitch’s latest email listed a number of factors S&P used to analyze Mississippi’s finances and arrive at its conclusion:
▪ Weakness in revenue trends
▪ Weakness in several national indicators, such as economic growth, population growth, educational attainment, unemployment and industry diversity
▪ An already stressed budget
▪ High debt burden
▪ Low and declining funded ratio for the Mississippi Public Employees Retirement System